Reliance Corporation Has Provided the Following Information for the Year

question 34

Multiple Choice

Reliance Corporation has provided the following information for the year ended December 31, 2014: • The equipment account balance increased $200,000.
• The equipment accumulated depreciation account increased $35,000.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
Which of the following statements is correct with respect to determining cash flow from operating activities?

• A) Using the indirect method, net income is increased by the $35,000 increase in accumulated depreciation.
• B) Using the indirect method, net income is decreased by the $30,000 sales price of the equipment.
• C)Using the indirect method, net income is increased by the $65,000 depreciation expense.
• D)Using the indirect method, net income is increased by the $10,000 gain on the sale of the equipment.

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Definitions:

Cost Estimation Methods

Various approaches used to predict the future costs associated with a project or product, including empirical cost inference, parametric modeling, and analogical estimation.

Regression Analysis

A statistical method used for estimating the relationships among variables.

Polishing Machine

A device used in manufacturing or metalworking processes to smooth surfaces or improve finish quality through abrasion techniques.

Regression Output

The result of a regression analysis, providing statistical measurements that estimate the relationship between dependent and independent variables.